Corporate Responsibility Report 2007 Corporate Responsibility Report 2007 Index Page number Welcome 2 Performance Summary 2007 3 Managing our Responsibilities Our Approach 6 Governance 7 Environment 8 Stakeholder Engagement 11 Scope 12 Benchmarking and Recognition 13 Our 12 Impacts 15 Provision of Energy 16 Health and Safety 25 Customer Experience 35 Climate Change and Emissions to Air 43 Waste and Resource Use 52 Biodiversity 62 Sites, Siting and Infrastructure 70 Employment Experience 75 Customers with Special Circumstances 88 Community 94 Procurement 107 Economic 113 Assurance Statement 116 Page 1 of 118 www.scottishpower.com/CorporateResponsibility.asp Corporate Responsibility Report 2007 Welcome 2007 was a landmark year for our business with the successful integration of ScottishPower and IBERDROLA. The new enlarged IBERDROLA Group ended 2007 as one of the worlds largest electricity companies by market capitalisation. Through the friendly integration, now successfully completed, we have reinforced our shared commitment to Corporate Responsibility. Our reporting year has been aligned to IBERDROLA so going forward we will be working on a calendar year basis. Achieving Scottish Business in the Community Large Company of the Year in 2007 was an important endorsement for ScottishPowers work and to our commitment to environmental and social issues. During 2007, we have announced significant investments in sustainable generation projects and environmental technologies; increased our 2010 target for delivery of wind energy projects in the UK to 1,200 MW and established partnerships that will help secure Scotlands place as the world leader in marine energy. In addition, we announced the UKs largest energy crop project and embarked on a major study into cleaner coal generation. Corporate responsibility is about developing the strength of our business, while respecting the needs of our stakeholders. It involves managing the potentially negative impacts of our business on society, while leveraging our activities to create benefits for communities, customers, employees and the environment. We remain committed to being a socially responsible company with best practice in corporate governance, business topics and respect for the environment. This commitment creates a sense of belonging and trust amongst stakeholders. The ScottishPower senior management team continue to report on the 12 UK impact areas, whilst also now globally report our enhanced CSR credentials to the wider IBERDROLA Group. We as a fully integrated Group, are committed to a multi local approach ensuring ScottishPower continue its dialogue and relationships with key stakeholders. The establishment of the ScottishPower Advisory Board with membership from leaders in business, finance, public policy and academic research is an important link in ensuring our activities are globally coordinated and implemented in the most appropriate way within the UK and Scotland. Our community and sponsorship spend at £4.9 million for last year has increased year on year. The integration with IBERDROLA provides a global platform for our combined Corporate Social Responsibility activities which together with a real and ongoing commitment to the local communities in which we operate, creates real and long lasting benefits for all our stakeholders and society. I hope you find this report useful and engaging, and I would be to hear your opinions and thoughts on any of the matters raised within the report, or indeed any other aspect of our operations. José Luis del Valle Vice Chairman Page 2 of 118 www.scottishpower.com/CorporateResponsibility.asp Corporate Responsibility Report 2007 Performance Summary 2007 Provision of Energy Ź Ended 2007 with more than 100% of our 2010 target for renewables commissioned, under construction or consented. Target has been increased to 1,200 MW of renewables by 2010 Ź ScottishPower Renewables are one of the UKs leading operators of onshore wind with 372 MW operational (382 MW installed capacity), 666 MW consented or under construction and a further 599 MW in planning Ź Announced plans to build the worlds largest commercial wave farm off the coast of Orkney Health and Safety Ź EnergyNetworks won the IOSH Zurich Municipal Supreme Safety Award and the DuPont International Safety Award in recognition of the childrens safety education programme, PowerWise Ź Achieved successes in Scotlands Health at Work (SHAW) Awards for health promotion. Energy Wholesale achieved Gold and EnergyNetworks and Energy Retail achieved Silver Awards Ź Set up an asset safety programme following the collapse of a coal conveyor at Longannet Power Station in early 2007 and the collapse of a wind turbine at Beinn an Tuirc Windfarm in Kintyre Customer Experience Ź Customer complaints to energywatch dropped by 61% to an all-time low during the year. Direct complaints to the company reduced by 40% Ź uSwitch ranked ScottishPower top for online services and meter reading in their October 2007 survey of UK energy suppliers. In the same survey, we were ranked second for offering customers the best available deal and value for money Ź Customer research out of 70 areas and weighted attributes on which we gauge customer opinion, 36 have remained steady over the last year, 29 have declined and five have shown improvement. Climate Change and Emissions to Air Ź We were the only UK supplier to achieve our Energy Efficiency Commitment (EEC2) target for the period 2005-2008 a year early. We achieved energy savings of 107% of our three year target Ź Our £170 million project to fit Flue Gas Desulphurisation (FGD) at Longannet Power Station, will result in a further significant reduction in SO2 emissions from 2008 Ź Added 37 MW of new wind energy by commissioning Wether Hill and Wolf Bog windfarms and acquiring the remaining stakes in Coal Clough and Carland Cross windfarms Ź Began a 19 month feasibility study into the adoption of clean coal technology at Longannet and Cockenzie power stations, comprising supercritical boilers and turbines, and carbon capture and storage (CCS). During the year we conducted some specific work on aquifers in which we were the lead partner Waste and Resource Use Ź EnergyNetworks pioneered a new, safe oil sampling technique, reducing the volume of transformer oil used and sent for recycling Ź Rye House Power Stations rainwater harvesting scheme was recognised in the Environment Agencys annual report as an example of best practice Ź The volume of ash recovered for use in construction products increased by more than 45% on the previous reporting period, to more than 580,000 tonnes Page 3 of 118 www.scottishpower.com/CorporateResponsibility.asp Corporate Responsibility Report 2007 Biodiversity f ScottishPower Renewable Energys Biodiversity Extranet site won the Best Innovation Award in the 2007 Scottish Green Energy Awards f Prepared Habitat Management Plans for five new or extended windfarm sites, totalling 2,527 hectares, to be implemented in 2008 f Conducted trials at Unit 1 at Longannet Power Station of a fish catch and release system to explore viable methods of reducing the number of fish entrained at the cooling water intakes Sites, Siting and Infrastructure Ź EnergyNetworks completed connections to a further 520 MW of renewable energy capacity Ź Good progress was made with major projects to upgrade the transmission network in south west Scotland to accommodate new renewable energy schemes and on increasing the capacity of the Anglo-Scottish interconnector Ź Conducted reliability improvement work, such as automatic circuit reclosing, on 2,000 km of overhead lines Ź A programme of undergrounding parts of the network was implemented in Snowdonia National Park Employment Experience Ź Achieved best ever response rate of 80% to employee survey conducted in December 2007 Ź Employee newspaper, ScottishPower News, won the Best Staff Magazine 2007 at the Periodical Publishers Associations awards Ź Launched a new HR intranet service Your HR Online and delivered training in its use across the company Customers with Special Circumstances Ź Contributed a further £1 million to the ScottishPower Energy People Trust Ź During 2007, the Trust awarded funding of more than £1.45 million to 31 projects, helping 132,172 individuals in 42,633 households Ź Sponsored the National Energy Action Fuel Poverty Conference, which was held in the University of Chester in September 2007 Community Ź Community Investment of £4.9 million, almost £600,000 of this to Windfarm Community Trusts Ź ScottishPower was awarded Scottish Business in the Community Large Company of the Year 2007 Ź ScottishPower Learning won the Princes Trust Scotland Scottish regional Bombardier Partnership Innovation Award 2007, which is awarded to the partner who has demonstrated innovation in their support of the work of the Trust Ź ScottishPower Learning was awarded a Silver Jubilee Big Tick by Business in the Community. We were awarded a further eight Big Ticks for community learning and consultation and environmental projects Page 4 of 118 www.scottishpower.com/CorporateResponsibility.asp Corporate Responsibility Report 2007 Procurement Ź During the year we formed a consortium with EdF and Scottish and Southern Energy to explore the issues around the procurement of coal from global sources Ź Our Coal and Biofuels Trading Manager undertook a fact-finding visit to a mine in Indonesia that we identified as a potential supplier, to carry out checks on its operations Ź Two UK suppliers were recognised in our parent company IBERDROLAS